DEVELOMENT INSTITUTE

ENTREPRENEURSHIP
MANAGEMENT and
FUNDAMENTALS OF
FINANCIAL
MANAGEMENT

Prof. Mike Soledad

Fundamentals of Financial
Management

The role and function of the Chief

Finance Officer

Understanding financial statements

Financial Forecasting
 Board

Corporate Values
Desires, Musts, and Wants of
Stakeholders
Corporate Vision, Mission and
Goals

Corporate
Strategy
Finance Performance
Rest of the
Measurement
Organization and company
Resource
Allocation
 THE FINANCE FUNCTION : AN INTEGRAL PART OF THE ORGANIZATION

Corporate

Rest of the
Finance
Company

GATHERER, •PLANNER •ORGANIZER

SYNTHESIZER, •INTERPRETER •SCHEMER DECISION •CONTROLLER
•IMPLEMENTOR
REPORTER •ANALYST •PACKAGER MAKER •MONITOR
•NEGOTIATOR
OF INFO
Gathering information, synthesizing, reporting
• Accounting rules and conventions
• Physical realities
Accuracy

• Consistency
Comparability

• Help to clarify and understand

Usefulness • Basis for decision

• Understandability
Presentation
Interpreting, analyzing data
• Financial ratios
• Vertical/horizontal
Quantitative • Du Pont formula
tools • Variance analysis

• Knowing what we know, what

could have happened? What
Qualitative can we do?
analysis
Making decisions

• How do we spend our money?

The investment
decision

• Where do we source the

The financing
money we need?
decision
 Financial Decision Making

Investment Financing
Corporate Goals
Decision Decision
and Policies
Usage of Sourcing of
Funds Funds
Financial
Plan

Financial
Asset Debt / Equity
Management Objectives Management
Market Price, EPS
ROE, ROI, Meet
Constraints
PS
Current Fixed Investment
Debt Eqty
Assets Assets Portfolio
CS
Set Standards

Determine Behavioral STD LTD

Implications
Planning
• Where are we now?

• Where do we want to
go?

• How should we get

there?
Organizing, implementing, negotiating

Who will do
what when?
Controlling and monitoring

Efficiency Effectiveness Profitability

Reporting
mechanism
Feedback
Measures of performance
mechanism
Standard
setting Rewards and Punishment
 THE FINANCE FUNCTION : AN INTEGRAL PART OF THE ORGANIZATION

Corporate

Rest of the
Finance
Company

GATHERER, •PLANNER •ORGANIZER

SYNTHESIZER, •INTERPRETER •SCHEMER DECISION •CONTROLLER
•IMPLEMENTOR
REPORTER •ANALYST •PACKAGER MAKER •MONITOR
•NEGOTIATOR
OF INFO